The International Housewares Association (IHA), following a meeting with NACM lobbyist Jim Wise, recently lent its support to NACM's preference reform initiatives, namely those included in the organization's Issue Brief and Suggested Enhancements to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). Wise noted that, in his discussion with the IHA, the organization's interests were firmly aligned with those of NACM and B2B credit grantors and that its number-one legislative priority was the solution to this frequently burdensome preference issue.

The International Housewares Association (IHA), following a meeting with NACM lobbyist Jim Wise, recently lent its support to NACM's preference reform initiatives, namely those included in the organization's Issue Brief and Suggested Enhancements to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). Wise noted that, in his discussion with the IHA, the organization's interests were firmly aligned with those of NACM and B2B credit grantors and that its number-one legislative priority was the solution to this frequently burdensome preference issue.

NACM's proposed changes would move the burden of proof for preference claims from the creditor to the trustee, meaning that instead of forcing creditors to defend themselves from these claims and prove that a payment isn't a preference, the Bankruptcy Code would be altered to force trustees to first prove that a payment was preferential before they file the actual claim. The IHA believes that such a change would be beneficial to its membership as well and noted that it would advocate for this form of preference relief.

The Issue Brief and Suggested Enhancements to BAPCPA have already been submitted to the House Judiciary Committee, which has held hearings on the ramifications of automaker bankruptcies and on the inability of the Chapter 11 process to preserve jobs in the filing of fallen electronics giant, Circuit City. NACM's initial interest in altering BAPCPA came in response to a bill introduced by Rep. Jerrold Nadler (D-NY) that would roll back many of the improvements BAPCPA aimed to make, including the complete removal of the 20-day administrative priority claim granted to goods suppliers under Section 503(b)(9) of the Code. In addition to improving preference statutes to benefit unsecured creditors, NACM's changes would preserve and expand Section 503(b)(9) and also change venue and reclamation provisions.

NACM's eNews and advocacy page will continue to report updates. If you have any opinions or comments you'd like to share on bankruptcy or any other legislative issues, please email your comments to jakeb@nacm.org.